6 Fantastic Ways to File Taxes For Free

Filing taxes can be a burden for many taxpayers. Unfortunately, everyone has to file taxes even if you are unemployed or haven’t earned any income. If you don’t have accurate records it can be a nightmare.

The best way to file your taxes is to stay organized. File all receipts, paperwork or possible paperwork related to personal and business expenses and tax deductions, categorize them into separate folders, and keep handy.

The main expenses to keep track of are: all business income and spending, home office expenses, retirement contributions, student loan interest, energy efficient upgrades, real estate purchases or sales, charitable donations, contributions to college savings plan, and capital gains.

There are several options for filing taxes and some taxpayers are eligible to file their taxes for free. Here are 6 ways to file your taxes for free.

Free Software

If your adjusted gross income is $66,000 or less you can use free tax software such as: Turbo Tax, Free TaxAct, Tax Slayer or H&R Block’s Free File.

Use Free Forms

Anyone can use free file fillable forms from freefilefillableforms.com. The site provides online versions of paper federal tax forms.

Use Free Services

Find free tax clinics in you earn less than $62,000 per year www.irs.gov/uac/Contact-Your-Local-IRS-Office-1 or contact AARP if you 50 or older http://www.aarp.org/applications/VMISLocator/searchTaxAideLocations.action.

File Electronically

Efile (electronically) your tax return for free by using direct deposit or pay your taxes online for free by using irs.gov.

Paper forms

Use paper tax forms to file your taxes and mail them to the IRS. If you filed last year’s taxes with paper forms the IRS will mail you forms this year. The only cost is postage. To order paper tax forms call 800-829-3676 Monday through Friday 7 am - 7 pm.

USE TAX CLINICS

You can get your taxes prepared for free using the IRS Volunteer Income Tax Assistance (VITA) program. Call 1-800-906-9887 to get more information.

Tax Counseling for the Elderly (TCE) programs offers tax help for people 60 years old or older at 1-888-227-7669.

Visit an IRS volunteer at a self-assistance service site to get free tax preparation. Visit the IRS website irs.gov to find a facilitated self-assistance site.

Don't Fall for Tax Preparation Gimmicks

                                                         

According to FranchiseHelp Holdings there are approximately 38,287 tax preparations companies in the U.S. Approximately 144 million taxpayers filed tax returns last year. For several decades large chain tax preparation companies have preyed on low-income neighborhoods, inner-city and rural areas opening offices across the country. These taxpayers were lured into their offices promising to receive quick refunds in exchange for a fee knowing that most of these taxpayers were desperate for money and would jump at the opportunity even though it was a bad choice.

Offices are specifically located in areas where incomes are less than $50,000 or in areas where there are several check cashing stores and liquor stores. These tax preparation companies also lure these taxpayers into their offices with free coffee, snacks, and flat screen televisions in the waiting areas all to get repeat business and increase their profits.

In some instances customers are lied to and confused by the services offered and don’t realize that if they file their taxes online or through a free tax preparation center they can get their refund back in the same time period. These large chain companies are stealing money from low-income taxpayers who need their money the most.

The federal government stopped these large chain tax preparation companies from offering the refund anticipation loan or rapid refund. However, these tax preparation chains found a loophole around. H&R Block now offers taxpayers the gimmick to put your refund on an “Emerald Card” for a $45 fee or to you can get a “paystub loan” where taxpayers get a partial advance on their tax refund in December of January before the taxpayer receives their W-2. The interest charged on this paystub advance is 25% in addition to the fee charged to prepare their taxes.

H&R Block also has a “Second Look” gimmick where they offer to look over your taxes to find errors. When you file taxes the IRS will catch the errors and fix them for you so there is no need to waste time going to H&R Block or any other company.  Jackson Hewitt and Liberty Tax offer similar gimmicks. Jackson Hewitt allows taxpayers to go to Walmart to get their taxes prepared.  You have the following options:

• Get a Walmart prepaid debit card which requires you to load money onto the card for a fee.
• Receive a $10 Bluebird American Express gift card or get your tax refund for free if you get direct deposit
• Get at $20 Walmart gift card if you file your taxes online.
• Get a $50 Walmart gift card if you file your taxes in a Walmart store.

These are all gimmicks to get you in the Walmart store to shop. These companies charge higher prices, are inexperienced, make mistakes, use gimmicks, may not be honest, add a protection clause or an arbitration clause in their contracts which prevents taxpayers from suing them in court.

The alternatives to filing with the tax preparation chains are:

1.      File your taxes using a tax preparation software.

2.      File your taxes by mail.

3.      Hire an accountant or CPA.

4.      If you earn less than $60,000 go to a free tax preparation center by calling 800-906-9887 or using the site http://irs.treasury.gov/freetaxprep/ or use free tax preparation software which can be found on www.irs.gov.

5.      Use IRS Free File if your adjusted gross income is $60,000 or less.

6.      If your income is above $60,000 you can use Free File Fillable Forms available on the IRS website www.irs.gov.

7. Use an authorized tax efile provider which can be found on www.irs.gov.
8. Comparison Shop. Go to at least 3 companies to get price quotes to help you find the best deal.
9. Price match. Ask about price match guarantees that honor competitor prices.
10. Go with your gut. Use common sense. Go with your gut instinct, if you feel like the deal is too good to be true or if you feel like something is not right with the loan, don't sign it.
11. Ask questions. Ask lots of questions; have everything explained to you prior or during settlement.
12. If you still decide to use a tax preparation company and don’t want to pay their fee, you don't have to pay. You can take your paperwork, leave and look for another company to prepare your taxes.

Be wary of people or companies that brag about getting you large refunds, provide guarantees, or offer to get your refund quicker without ever seeing your taxes or knowing anything about you. When looking to hire a tax professional things to consider are:  qualifications, licensed in your state, experience, past references, work hours, professional reputation, trustworthiness, professionalism, professional memberships, your specific tax needs, comfortability and capability. 

8 Crucial Steps to Filing Your Taxes

Every year Americans have to file their taxes unless they don't earn enough income to qualify having taxes taken out of their income. There are heaps of free tools available to help you prepare your taxes and determine if you will get a refund or owe money.

Some of the most widely used tax preparation tools are Turbo Tax, Tax Cut and Tax Act and tax calculators available on top sites like Bankrate.com, MSN.com or CNN.com/money.

One of the reasons many Americans miss out on claiming deductions or end up owing taxes or is because their financial documents are not in order. Many throw away, misplace receipts or falsify documents because the original documents cannot be located.

Using tax preparation software has all the tax laws imbedded in the tool which makes it easier for you to see what deductions you are eligible to claim. Here are 7 crucial steps to help you get organized and file your taxes.

1. Gather. Gather all receipts, gather monthly, quarterly and yearly statements, medical bills, student loans, credit card statements, prescriptions, financial statements, etc. and place in one easy to find location.
2. Categorize. Categorize all receipts such as medical, loans, financial statements, purchases, business expenses, income, etc.
3. Plan ahead. Avoid waiting until the last minute. You can use an automated tool to track your spending and deductions or use a piece of paper, or Word or software such as Excel or Access to enter your data electronically.
4. Automate. Use a software package like Quicken or Quick Books to record all of your deductions. Use basic column headings: Item, Date Purchased or Sold, Cost, Quantity, Total Cost.
5. Deductions. Identify all items that can be used as itemized deductions and put them in one folder. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. If not, calculate your itemized deductions.
6. Go Green. File your taxes electronically. You will receive your refund in approximately two weeks from the date of filing and you help save the environment.
7. Be Patient. Don't get a tax refund anticipation check or refund anticipation loan. You are charged a fee to get your refund faster than waiting the normal waiting period due to a high interest rate charged for the loan. Save yourself some money.
8. Free Filing. If you salary is less than $57,000 or less you can file your taxes electronically for free.

Ways to Increase Your Tax Refund

It is that dreaded time of the year when everyone has to gather their receipts if you can find them to begin preparing to file taxes. Many argue that we should have a flat tax for all Americans. There are pros and cons to having a flat tax.

For now, we all have to pay our taxes or suffer the consequences like Wesley Snipes and be sent to jail. Some people try to avoid paying taxes by filing for bankruptcy but not all taxes can be included in bankruptcy.

If you plan on filing taxes this year here are some ways to increase your refund.

1. Tax Deductions. Check your health care costs, mortgage interest, closing and settlement costs, job-related expenses, tax preparation fees, moving costs, student loan interest or credit card interest which are just a few you can claim to increase your tax deductions.

2. State Sales Tax. If you live in a state that does not charge state taxes you can either deduct state and local sales taxes or state and local income taxes but you cannot deduct both. If you choose sales tax remember to include all items eligible for sales tax. Check the IRS website sales tax tables for your state.

3. Refinance. Don't forget to include your refinance costs when filing. When you refinance you have to deduct the mortgage points over the life of the loan so it's better to refinance for less time than your original loan. If you previously had a 30 year loan refinance to 20 years or less.

4. Property Tax. File a Schedule L to claim the property tax for personal property including car registration fees.

5. Casualty Loss. If you claim the standard deduction you can add casualty loss to your standard deduction amount if the loss occurred in an area that was declared as a disaster area by the President. You will have to file a Schedule L with your tax return to include the loss.

6. Read. Read the federal and state tax booklet that corresponds with your tax forms to make sure you are not overlooking any tax credits that you may be eligible for.

7. Avoid Rapid Refund. Don't get a rapid refund or loan. These usually have high interest rates and may not provide your refund faster than filing electronically.

8. Use Software. There are several free tax software available that you can use to file your taxes. Check frequently for software updates that may include additional tax deductions. Also look for free tax filing services in your area.

9. Reinvested Dividends (DRIP). Reinvested dividends cannot be deducted on your taxes but you can subtract the amount from your total taxable income which can save you money because it reduces your taxable capital gains.

10. Estate Tax. If you inherited an Individual Retirement Account (IRA) from an estate that was subject to estate taxes you can get an income tax deduction for the amount of estate tax paid on the IRA you received. You can claim an itemized deduction on Schedule A which will save you money.

It's Not to Late to File Your Taxes

This time of year accountants get very happy because they are busy with many customers. Everyone is not so happy unless you are getting a refund. A lot of the laws from last year have changed so please be sure to read the instructions when filing your 2009 taxes. Here are 6 tips to help you file your taxes. Thanks.

1. Gather all receipts, monthly/quarterly statements, medical bills, student loans, credit card debt, etc.

2. Be cautious when purchasing a tax preparation software. Research the credibility of the company and verify if the software provides automatic updates to tax laws contained in the software. Go to Better Business Bureau website to check out a company's history. Click on the Business Link under the Check It Out section. Use a software package like Quicken or Quick Books to record all of your deductions. If you don't have this software then you can use an Excel spreadsheet with these basic column headings, Item, Date Purchased or Sold, Cost, Quantity, Total Cost. If you don't have the Excel software program just use plain old pencil and paper.

3. Identify all items that can be used as itemized deductions and put them in one pile. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. (The list of items you gathered in step 2 and verified against the tax form instruction manual as items that can be itemized). If your standard deduction is greater than use the standard deduction, if not, use the worksheet included with your taxes to calculate your itemized deductions.

4. To save money file your taxes electronically. You will receive your refund in approximately two weeks from the date of filing.

5. Don't get a tax refund loan or refund anticipation loan. This is a waste of time and of money. You usually have to pay a fee to get the refund loan which usually have high interest rates and associated fees. See the article discussing this issue.

6. If you are owed taxes this year and are unable to pay your taxes by April 15, 2010, file an extension no later than April 15, 2010 or setup a payment plan. If is never wise to owe taxes because the interest and penalties fees that accrue each day will put you further into debt.